Mr. Menendez (for
himself, Mr. Reid, and
Mr. Hatch) introduced the following bill;
which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to encourage
alternative energy investments and job creation.

1.

Short title, etc

(a)

Short
title

This Act may be cited
as the New Alternative Transportation
to Give Americans Solutions.

(b)

Amendment of
1986 Code

Except as otherwise
expressly provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.

(c)

Table of
contents

The table of contents for this Act is as follows:

Sec. 1. Short title, etc.

TITLE I—Promote the Purchase and Use of NGVs With an Emphasis on
Heavy Duty Vehicles and Fleet Vehicles

Sec. 403. Sense of the Senate on EPA certification of NGV
retrofit kits.

I

Promote the
Purchase and Use of NGVs With an Emphasis on Heavy Duty Vehicles and Fleet
Vehicles

101.

Modification of
alternative fuel credit

(a)

Alternative fuel
credit

Paragraph (5) of section 6426(d) (relating to alternative
fuel credit) is amended by inserting , and December 31, 2019, in the
case of any sale or use involving compressed or liquefied natural gas)
after hydrogen.

(b)

Alternative fuel
mixture credit

Paragraph (3)
of section 6426(d) is amended by inserting , and December 31, 2019, in
the case of any sale or use involving compressed or liquefied natural
gas) after hydrogen.

(c)

Payments
relating to alternative fuel or alternative fuel
mixtures

Paragraph (6) of section 6427(e) is amended—

(1)

in subparagraph
(C)—

(A)

by striking
subparagraph (D) in subparagraph (C) and inserting
subparagraphs (D) and (E), and

(B)

by striking
and at the end thereof,

(2)

by striking the
period at the end of subparagraph (D) and inserting , and,
and

(3)

by inserting at
the end the following:

(E)

any alternative fuel or alternative fuel
mixture (as so defined) involving compressed or liquefied natural gas sold or
used after December 31,
2019.

.

(d)

Effective
date

The amendments made by this section shall apply to fuel sold
or used after the date of the enactment of this Act.

Paragraph (4) of
section 30B(k) (relating to termination) is amended by inserting
(December 31, 2019, in the case of a vehicle powered by compressed or
liquefied natural gas) before the period at the end.

(b)

Effective
date

The amendment made by subsection (a) shall apply to property
placed in service after the date of the enactment of this Act.

103.

Allowance of
vehicle and infrastructure credits against regular and minimum tax and
transferability of credits

(a)

Business
credits

Subparagraph (B) of section 38(c)(4) is amended by
striking and at the end of clause (vii), by striking the period
at the end of clause (viii) and inserting , and, and by
inserting after clause (viii) the following new clauses:

(ix)

the portion of the credit determined under
section 30B which is attributable to the application of subsection (e)(3)
thereof with respect to new qualified alternative fuel motor vehicles which are
capable of being powered by compressed or liquefied natural gas, and

(x)

the portion of the credit determined under
section 30C which is attributable to the application of subsection (b) thereof
with respect to refueling property which is used to store and or dispense
compressed or liquefied natural
gas.

.

(b)

Personal
credits

(1)

New qualified
alternative fuel motor vehicles

Subsection (g) of section 30B is
amended by adding at the end the following new paragraph:

In the case of the portion of the credit
determined under subsection (a) which is attributable to the application of
subsection (e)(3) with respect to new qualified alternative fuel motor vehicles
which are capable of being powered by compressed or liquefied natural
gas—

(A)

paragraph (2) shall (after the application
of paragraph (1)) be applied separately with respect to such portion,
and

(B)

in lieu of the
limitation determined under paragraph (2), such limitation shall not exceed the
excess (if any) of—

(i)

the sum of the
regular tax liability (as defined in section 26(b)) plus the tentative minimum
tax for the taxable year, reduced by

(ii)

the sum of the
credits allowable under subpart A and sections 27 and
30.

.

(2)

Alternative fuel
vehicle refueling properties

Subsection (d) of section 30C is
amended by adding at the end the following new paragraph:

In the case of the portion of the credit
determined under subsection (a) with respect to refueling property which is
used to store and or dispense compressed or liquefied natural gas and which is
attributable to the application of subsection (b)—

(A)

paragraph (2)
shall (after the application of paragraph (1)) be applied separately with
respect to such portion, and

(B)

in lieu of the
limitation determined under paragraph (2), such limitation shall not exceed the
excess (if any) of—

(i)

the
sum of the regular tax liability (as defined in section 26(b)) plus the
tentative minimum tax for the taxable year, reduced by

(ii)

the sum of the
credits allowable under subpart A and sections 27, 30, and the portion of the
credit determined under section 30B which is attributable to the application of
subsection (e)(3)
thereof.

.

(c)

Credits may be
transferred

(1)

Vehicle
credits

Subsection (h) of
section 30B is amended by adding at the end the following new paragraph:

(11)

Transferability
of credit

(A)

In
general

Except as provided in subparagraph (B), a taxpayer who
places in service any new qualified alternative fuel motor vehicle which is
capable of being powered by compressed or liquefied natural gas may transfer
the credit allowed under this section by reason of subsection (e) with respect
to such vehicle through an assignment to the seller or lessor of such vehicle.
Such transfer may be revoked only with the consent of the Secretary.

(B)

Denial of
double benefit

No assignment of a credit allowed under this
section by reason of subsection (e) with respect to any new qualified
alternative fuel motor vehicle which is capable of being powered by compressed
or liquefied natural gas may be made under subparagraph (A) to a taxpayer who
has claimed a credit under section 54G with respect to the financing of such
vehicle.

(C)

Regulations

The
Secretary shall prescribe such regulations as necessary to ensure that any
credit transferred under subparagraph (A) is claimed once and not reassigned by
such other
person.

.

(2)

Infrastructure
credit

Subsection (e) of section 30C is amended by adding at the
end the following new paragraph:

(7)

Transferability
of credit

(A)

In
general

Except as provided in subparagraph (B), a taxpayer who
places in service any qualified alternative fuel vehicle refueling property
relating to compressed or liquefied natural gas may transfer the credit allowed
under this section with respect to such property through an assignment to the
seller or lessor of such property. Such transfer may be revoked only with the
consent of the Secretary.

(B)

Denial of
double benefit

No assignment of a credit allowed under this
section by reason of subsection (e) with respect to any qualified alternative
fuel vehicle refueling property relating to compressed or liquefied natural gas
may be made under subparagraph (A) to a taxpayer who has claimed a credit under
section 54G with respect to the financing of such property.

(C)

Regulations

The
Secretary shall prescribe such regulations as necessary to ensure that any
credit transferred under subparagraph (A) is claimed once and not reassigned by
such other
person.

.

(d)

Effective
date

The amendments made by this section shall apply with respect
to property placed in service after the date of the enactment of this
Act.

104.

Natural gas
vehicle bonds

(a)

In
general

Subpart I of part IV
of subchapter A of chapter 1 (relating to qualified tax credit bonds) is
amended by adding at the end the following new section:

54G.

Natural gas
vehicle bonds

(a)

Natural gas
vehicle bond

For purposes of this subpart, the term natural
gas vehicle bond means any bond issued as part of an issue if—

(1)

100 percent of
the available project proceeds of such issue are to be used for capital
expenditures incurred by a governmental body for 1 or more qualified natural
gas vehicle projects placed in service by such governmental body primarily for
governmental or public use,

(2)

the bond is
issued by a governmental body,

(3)

the issuer
designates such bond for purposes of this section, and

(4)

in lieu of the
requirements of section 54A(d)(2), the issue meets the requirements of
subsection (c).

(b)

Limitation on
amount of bonds designated

(1)

In
general

The maximum aggregate face amount of bonds which may be
designated under subsection (a) by any issuer shall not exceed the limitation
amount allocated under this subsection to such issuer.

(2)

National
limitation on amount of bonds designated

There is a national
natural gas vehicle bond limitation of $3,000,000,000.

(3)

Allocation by
Secretary

The Secretary shall allocate the amount described in
paragraph (2) among qualified natural gas vehicle projects in such manner as
the Secretary determines appropriate.

(c)

Special rules
relating to expenditures

(1)

In
general

An issue shall be treated as meeting the requirements of
this subsection if, as of the date of issuance, the issuer reasonably
expects—

(A)

100 percent or
more of the available project proceeds of such issue are to be spent for 1 or
more qualified natural gas vehicle projects within the 5-year period beginning
on the date of issuance of the natural gas vehicle bond,

(B)

a binding
commitment with a third party to spend at least 10 percent of such available
project proceeds will be incurred within the 6-month period beginning on the
date of issuance of the natural gas vehicle bond, and

(C)

such projects
will be completed with due diligence and such available project proceeds will
be spent with due diligence.

(2)

Extension of
period

Upon submission of a request prior to the expiration of
the period described in paragraph (1)(A), the Secretary may extend such period
if the issuer establishes that the failure to satisfy the 5-year requirement is
due to reasonable cause and the related projects will continue to proceed with
due diligence.

(3)

Failure to
spend required amount of bond proceeds within 5 years

To the
extent that less than 100 percent of the available project proceeds of such
issue are expended by the close of the 5-year period beginning on the date of
issuance (or if an extension has been obtained under paragraph (2), by the
close of the extended period), the issuer shall redeem all of the nonqualified
bonds within 90 days after the end of such period. For purposes of this
paragraph, the amount of the nonqualified bonds required to be redeemed shall
be determined in the same manner as under section 142.

(d)

Governmental
body

For purposes of this section, the term governmental
body means any State or Indian tribal government, or any political
subdivision thereof.

(e)

Qualified
natural gas vehicle project

For purposes of this subpart, the
term qualified natural gas vehicle project means—

(1)

1 or more new qualified alternative fuel
motor vehicles which are capable of being powered by compressed or liquefied
natural gas (within the meaning of section 30B(e)(4)), or

(2)

1 or more qualified alternative fuel
vehicle refueling properties which are used to store and or dispense compressed
or liquefied natural gas (within the meaning of section 30C(c)).

(f)

Termination

This
section shall not apply with respect to any bond issued after December 31,
2019.

.

(b)

Conforming
amendments

(1)

Paragraph (1) of
section 54A(d) is amended by striking or at the end of
subparagraph (D), by inserting or at the end of subparagraph
(E), and by inserting after subparagraph (E) the following new
subparagraph:

(F)

a natural gas
vehicle
bond,

.

(2)

Subparagraph (C)
of section 54A(d)(2) is amended by striking and at the end of
clause (iv), by striking the period at the end of clause (v) and inserting
, and, and by adding at the end the following new clause:

(vi)

in the case of a
natural gas vehicle bond, a purpose specified in section
54G(a)(1).

.

(c)

Clerical
amendment

The table of sections for subpart I of part IV of
subchapter A of chapter 1 is amended by adding at the end the following new
item:

Sec. 54G. Natural gas vehicle
bonds.

.

(d)

Effective
date

The amendments made by this section shall apply to bonds
issued after the date of the enactment of this Act.

105.

Modification of
credit for purchase of vehicles fueled by compressed natural gas or liquified
natural gas

(a)

Increase in
credit

Paragraph (2) of
section 30B(e) (relating to applicable percentage) is amended to read as
follows:

(2)

Applicable
percentage

For purposes of paragraph (1), the applicable
percentage with respect to any new qualified alternative fuel motor vehicle
is—

(A)

except as provided in subparagraphs (B) and
(C)—

(i)

50 percent,
plus

(ii)

30 percent, if
such vehicle—

(I)

has received a
certificate of conformity under the Clean Air Act and meets or exceeds the most
stringent standard available for certification under the Clean Air Act for that
make and model year vehicle (other than a zero emission standard), or

(II)

has received an
order certifying the vehicle as meeting the same requirements as vehicles which
may be sold or leased in California and meets or exceeds the most stringent
standard available for certification under the State laws of California
(enacted in accordance with a waiver granted under section 209(b) of the Clean
Air Act) for that make and model year vehicle (other than a zero emission
standard),

(B)

80 percent, in the case of vehicles that
are only capable of operating on compressed natural gas or liquefied natural
gas, or mix-fuel vehicles which are capable of operating on compressed or
liquefied natural gas, and

(C)

50 percent, in the
case of vehicles described subsection (e)(4)(A)(i)(II).

For
purposes of the preceding sentence, in the case of any new qualified
alternative fuel motor vehicle which weighs more than 14,000 pounds gross
vehicle weight rating, the most stringent standard available shall be such
standard available for certification on the date of the enactment of the Energy
Tax Incentives Act of
2005.

.

(b)

Higher
incremental cost limits for natural gas vehicles

Subsection (e) of section 30B (relating to
new qualified alternative fuel motor vehicle credit) is amended by adding at
the end the following new paragraph:

(6)

Higher
incremental cost limits for natural gas vehicles

In the case of new qualified alternative
fuel motor vehicles with respect to vehicles powered by compressed or liquefied
natural gas, paragraph (3) shall be applied—

(A)

in subparagraph
(A) by substituting $12,500 for $5,000,

(B)

in subparagraph (B) by substituting
$20,000 for $10,000,

(C)

in subparagraph (C) by substituting
$50,000 for $25,000, and

(D)

in subparagraph (D) by substituting
$80,000 for
$40,000.

.

(c)

Effective
date

The amendment made by this section shall apply to property
placed in service after the date of the enactment of this Act.

106.

Modification of
definition of new qualified alternative fuel motor vehicle

(a)

In
general

Clause (i) of section 30B(e)(4)(A) (relating to
definition of new qualified alternative fuel motor vehicle) is amended to read
as follows:

(i)

which—

(I)

is only capable of
operating on an alternative fuel, or

(II)

is capable of operating on compressed or
liquefied natural gas and gasoline or diesel fuel, but in no case shall such
vehicle have an operating range of less than 200 miles on compressed or
liquefied natural
gas.

.

(b)

Conversions and
repowers

Paragraph (4) of
section 30B(e) is amended by adding at the end the following new
subparagraph:

(C)

Conversions and
repowers

(i)

In
general

The term new qualified alternative fuel motor
vehicle includes the conversion or repower of a new or used vehicle so
that it is capable of operating on an alternative fuel as it was not previously
capable of operating on an alternative fuel.

(ii)

Treatment as
new

A vehicle which has been converted to operate on an
alternative fuel shall be treated as new on the date of such conversion for
purposes of this section.

(iii)

Rule of
construction

In the case of a used vehicle which is converted or
repowered, nothing in this section shall be construed to require that the motor
vehicle be acquired in the year the credit is claimed under this section with
respect to such
vehicle.

.

(c)

Effective
date

The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.

Part VI of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by inserting after section 179E the
following new section:

A taxpayer may elect to treat the applicable percentage
of the cost of any qualified natural gas vehicle manufacturing facility
property as an expense which is not chargeable to a capital account. Any cost
so treated shall be allowed as a deduction for the taxable year in which the
qualified manufacturing facility property is placed in service.

(b)

Applicable
percentage

For purposes of subsection (a), the applicable
percentage is—

(1)

100 percent, in
the case of qualified natural gas vehicle manufacturing facility property which
is placed in service before January 1, 2015, and

(2)

50 percent, in
the case of qualified natural gas vehicle manufacturing facility property which
is placed in service after December 31, 2014, and before January 1,
2020.

(c)

Election

(1)

In
general

An election under this section for any taxable year shall
be made on the taxpayer's return of the tax imposed by this chapter for the
taxable year. Such election shall be made in such manner as the Secretary may
by regulations prescribe.

(2)

Election
irrevocable

Any election made under this section may not be
revoked except with the consent of the Secretary.

which is placed
in service by the taxpayer after the date of the enactment of this section and
before January 1, 2020, and

(C)

no written
binding contract for the construction of which was in effect on or before the
date of the enactment of this section.

(2)

Qualified
property

(A)

In
general

The term qualified property means any
property which is a facility or a portion of a facility used for the production
of—

(i)

any new qualified
alternative fuel motor vehicle which is capable of being powered by compressed
or liquefied natural gas (within the meaning of section 30B(e)(4)), or

(ii)

any eligible
component.

(B)

Eligible
component

The term eligible component means any
component which is designed specifically for use in such a new qualified
alternative fuel motor vehicle.

(e)

Special rule
for dual use property

(1)

In
general

In the case of any qualified natural gas vehicle
manufacturing facility property which is used to produce both property
described in clauses (i) and (ii) of subsection (d)(2)(A) and property which is
not so described, the amount of costs taken into account under subsection (a)
shall be reduced by an amount equal to—

(A)

the total amount
of such costs (determined before the application of this subsection),
multiplied by

(B)

the percentage of
property expected to be produced which is not so described.

(2)

Regulations

The Secretary shall prescribe such
regulations as are necessary to carry out the purpose of this
subsection.

.

(b)

Refund of
credit for prior year minimum tax liability

Section 53 (relating
to credit for prior year minimum tax liability) is amended by adding at the end
the following new subsection:

In the case of an eligible taxpayer, the amount
determined under subsection (c) for the taxable year (after the application of
subsection (e)) shall be increased by an amount equal to the applicable
percentage of any qualified natural gas vehicle manufacturing facility property
which is placed in service during the taxable year.

(2)

Applicable
percentage

For purposes of paragraph (1), the applicable
percentage is—

(A)

35 percent, in
the case of qualified natural gas vehicle manufacturing facility property which
is placed in service before January 1, 2015, and

(B)

17.5 percent, in
the case of qualified natural gas vehicle manufacturing facility property which
is placed in service after December 31, 2014, and before January 1,
2020.

(3)

Eligible
taxpayer

For purposes of this subsection, the term eligible
taxpayer means any taxpayer—

(A)

who places in
service qualified natural gas vehicle manufacturing facility property during
the taxable year,

(B)

who does not make
an election under section 179F(c), and

(C)

who makes an
election under this subsection.

(4)

Other
definitions and special rules

(A)

Qualified
natural gas vehicle manufacturing facility property

The term
qualified natural gas vehicle manufacturing facility property has
the meaning given such term under section 179F(d).

(B)

Special rule
for dual use property

In the case of any qualified natural gas
vehicle manufacturing facility property which is used to produce both qualified
property (as defined in section 179F(d)) and other property which is not
qualified property, the amount of costs taken into account under paragraph (1)
shall be reduced by an amount equal to—

(i)

the total amount
of such costs (determined before the application of this subparagraph),
multiplied by

(ii)

the percentage
of property expected to be produced which is not qualified property.

(C)

Election

(i)

In
general

An election under this subsection for any taxable year
shall be made on the taxpayer's return of the tax imposed by this chapter for
the taxable year. Such election shall be made in such manner as the Secretary
may by regulations prescribe.

(ii)

Election
irrevocable

Any election made under this subsection may not be
revoked except with the consent of the Secretary.

(5)

Credit
refundable

For purposes of this title (other than this section),
the credit allowed by reason of this subsection shall be treated as if it were
allowed under subpart
C.

.

(c)

Effective
date

The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.

III

Incentivize the
Installation of Natural Gas Fuel Pumps at Service Stations and Depots and
Domestic LNG Production Facilities for Small Energy Producers

The credit allowed under subsection (a)
with respect to all qualified alternative fuel vehicle refueling property
placed in service by the taxpayer during the taxable year at a location shall
not exceed—

(1)

except as provided in paragraph (2),
$30,000 in the case of a property of a character subject to an allowance for
depreciation,

(2)

in the case of a
compressed natural gas, or liquefied natural gas, the lesser of—

(A)

50 percent of such
cost, or

(B)

$100,000,
and

(3)

$2,000 in any
other
case.

.

(b)

Effective
date

The amendment made by this section shall apply to property
placed in service in taxable years beginning after December 31, 2010.

IV

Natural Gas
Vehicles

401.

Natural gas
vehicles in Federal fleet

When
complying with mandatory Federal fleet alternative fuel vehicle purchase
requirements, Federal agencies shall purchase dedicated alternative fuel
vehicles unless the agency can show that alternative fuel is unavailable or
purchasing such vehicles would be impractical.

402.

Grants for
natural gas vehicles research and development

(a)

In
general

The Secretary of
Energy may make grants to original equipment manufacturers of light duty and
heavy duty natural gas vehicles for the development of engines that reduce
emissions, improve performance and efficiency, and lower cost.

(b)

Limitation

The
aggregate amount of grants under subsection (a) for any fiscal year shall not
exceed $30,000,000.

403.

Sense of the
Senate on EPA certification of NGV retrofit kits

It is the sense of the Senate that the
Environmental Protection Agency should streamline the process for certification
of natural gas vehicle retrofit kits to promote energy security while still
fulfilling the mission of the Clean Air Act.